Bridgewater Associates, the largest hedge fund in the world, is becoming a partnership in move that shifts power from founder Ray Dalio and his inner circle to more of the firm’s top executives.
The firm’s three co-chief investment officers, who are also its majority owners — Mr Dalio, Bob Prince and Greg Jensen — told Bridgewater employees on Thursday that the firm’s employees will have a say in management and governance.
The men have selected a group of “seed partners” who will be charged with deciding the make-up and direction of the partnership, along with a wider group of provisional partners.
Mr Dalio will remain in his roles as co-CIO and co-chairman, having relinquished his co-chief executive officer title in March last year. David McCormick and Eileen Murray are currently the co-CEOs.
Mr Dalio, 68, has struggled to let go of control at the hedge fund he founded in 1975 and built into one of the most successful in the world, now managing $150bn.
A once-favoured potential successor, Mr Jensen, was stripped of his title of co-chief executive in 2016 after a series of disagreements. Last year, Jon Rubinstein, a former Apple executive brought in as co-CEO, announced he would leave the firm after less than a year there.
Mr Dalio began the succession process in 2010 and said it would take up to 10 years. Last year, he said he planned to cut his hours from about 60 hours a week to around 50 but still expected “to remain a professional investor at Bridgewater until I die or until those running Bridgewater don’t want me any more”.
“Bridgewater is on the road few hedge funds have successfully travelled,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business. “It is trying to complete a generational transition. Its thick and no-hidden-politics culture gives it a better chance of succeeding than most funds have.”
Bridgewater is the highest-grossing hedge fund of all time, having made $49.7bn for its clients since its inception, according to an annual list compiled by LCH Investments, the fund of hedge funds run by the Edmond de Rothschild group.
It is known for its unique internal culture, where Mr Dalio imposes what he calls “radical truth and radical transparency”, encouraging employees to openly air disagreements and challenge each other.
The firm has said that about one in five people it hires fails to fit into the culture and leave within the first year.
